Labour have launched a new election ad featuring Boris Johnson and Jacob Rees-Moog standing in front of a blue bus decked out with the slogan: “We’ll send Trump £500 million a week. Let’s fund US drug firms, not our NHS.”
The £500 million comes from research highlighted in a recent Channel 4 Dispatches documentary.
It shows how much it would cost the health service if British patients had to pay the same price for drugs as people in the US do.
As Dispatches explored, it’s a matter of debate how realistic this scenario is, and the Conservative government has denied it has any plans to do a deal with the Trump administration that would put the finances of the NHS at risk.
Labour’s slogan – that ministers “will send” £500 million – goes beyond anything stated in the documentary.
The analysis
Both the UK and US governments have said they want to strike a bilateral trade deal after Brexit.
Back in February, the Americans published a document setting out their negotiating objectives. British officials are yet to follow suit, and it’s not clear how far the negotiations have progressed.
Channel 4 aired an edition of the documentary series Dispatches last week called Trump’s Plan for the NHS (Dispatches and Channel 4 News are made by different producers).
The programme quoted a source familiar with initial talks between US and UK officials as saying that “drug pricing” had been discussed in six meetings, adding: “Precise details of what has been discussed has been kept strictly confidential.”
There have been five other undeclared meetings between senior British civil servants and representatives of American pharmaceutical companies, with “price caps” on medicines discussed in at least one meeting, Dispatches reported.
The programme also spoke to North Carolina politician Mark Meadows – a Republican and close ally of Donald Trump – who has introduced a bill to Congress called the Fixing Global Freeloading Act.
The bill states: “International government price controls of pharmaceutical products and services creates an unfair playing field because the rest of the world relies on and benefits from the biopharmaceutical innovation that takes place in the United States.”
Dispatches also quoted a document prepared by lobbyists for the US pharmaceutical industry accusing the UK of “actions that distort markets and artificially depress prices”.
Could drug prices rise?
A number of experts have expressed the fear that the US government could try to force British patients to pay more for US-made drugs.
The NHS is a huge buyer of drugs from companies worldwide and uses its bargaining power to negotiate big discounts from companies. The regulator NICE also rules that some drugs are not cost-effective.
In the US, where there is no central state-run health authority and less regulation, prices tend to be much higher.
President Trump and other senior Republicans have complained about what they call “freeloading” at America’s expense, and say they want foreign buyers to pay more for US-made medicines.
The American negotiating objectives contain one reference to pharmaceuticals, saying the US government wants to “ensure that government regulatory reimbursement regimes are transparent, provide procedural fairness, are non-discriminatory, and provide full market access for US products”.
The worry is that the US will have the upper hand in trade talks, as it is offering access to a bigger market, and negotiators will try to force the NHS to pay more for drugs.
There are also concerns that the US could try to strengthen rules on how long drug makers enjoy a monopoly on new products, or try to allow pharmaceutical companies to sue the British government to try to weaken NHS cost controls.
How much more?
Dr Andrew Hill from the University of Liverpool, a drug pricing expert and adviser to the World Health Organization, told Dispatches the NHS could end up paying £27bn more on drugs, or around £500m a week.
This is based on a simple calculation: The UK spends about £18bn on drugs, and the OECD estimates that theUS spends about 2.5 times as much per capita.
Multiple £18bn by 2.5 and you get £45bn.
In a report he prepared before Dispatches went to air, Dr Hill writes: “We can thus crudely estimate that if prices of medicines in the UK were equal to prices in the US, NHS England pharmaceutical expenditures in 2017/18 would have been an additional £27 billion annually or about £519 million per week.”
So “£500m a week” is the extra amount the NHS might have to pay if, hypothetically, it suddenly had to start paying American prices for all the drugs it buys.
(Read Dr Hill’s full report here: US-UK trade deal Channel 4)
Is this likely to happen?
This is the most important question, and of course it’s one no one can answer, because we can’t FactCheck the future.
Here’s what we do know: Donald Trump and other senior members of his administration have said contradictory things about American interest in the NHS.
At a press conference in June this year, President Trump said: “When you’re dealing with trade everything is on the table, so the NHS or anything else, or a lot more than that.”
This caused a huge backlash in the UK media, and a day later the President said: “I don’t see it being on the table” and adding that the NHS was something he would “not consider part of trade”.
In a recent interview with Nigel Farage, Mr Trump said: “It’s not for us to have anything to do with your healthcare system.”
It’s also fair to say that the British government has published very little information about the progress of talks. The Dispatches episode relied on an anonymous source with knowledge of confidential meetings.
But the UK government has strenuously denied that it would do anything to put the NHS in financial jeopardy, and we can speculate about the political fallout this would cause in a country where public support for the health service cuts across party lines.
Dispatches reporter Anthony Barnett put this to Dr Andrew Hill in the documentary, saying: “That is a big figure, but that’s if the UK government rolled over and accepted everything that US pharma and the US government want.
“That’s not how trade negotiations go. What kind of Prime Minister is going to sign a trade deal that is going to add £27bn to NHS costs?”
Dr Hill replied: “I think there is very little understanding about just how high US drug prices are and how these trade negotiations could lead to these higher drug prices. Donald Trump has said he wants to see higher drug prices for foreign governments.
“I don’t think people have any idea how much money is involved here. I think everybody needs to go into this with their eyes wide open.”
Conservative denials
In September, Boris Johnson told President Trump in a press conference that the NHS “is not for sale”.
In a Telegraph article last week, the Health Secretary, Matt Hancock, wrote: “The NHS will never, under any circumstances, be on the table in any future trade talks. The price the NHS pays for drugs won’t be on the table.”
In a response to the Dispatches programme, a government spokesman said: “The sustainability of the NHS is an absolute priority for the government. We could not agree to any proposals on medicines pricing or access that would put NHS finances at risk or reduce clinician and patient choice.”
Labour’s ad appears to suggest that the Conservatives have already made some kind of commitment to pay more to US drug companies: “We’ll send Trump £500 million a week.”
But there’s no evidence that this is the case, and Conservative ministers have consistently denied it.
Labour are putting the issue of credibility at the heart of the debate, marrying the advertisement with the slogan: “You can’t trust Boris Johnson with the NHS.”
At a press conference this week, Channel 4 News asked Jeremy Corbyn if Labour was misleading voters with the bus advert.
The Labour leader said: “Our figure of £500 million comes from an analysis of figures from the World Health Organization of drug prices and what we know of the discussions that have taken place between the NHS and US drug companies. And I believe it to be an accurate and credible figure.”
